In an unexpected move Microsoft today announced that the Platforms & Services Devision (PSD) will be split into two groups: Windows/Windows Live and Online Services. While the PSD President Kevin Johnson will work to ensure a smooth transition he will be leaving the company after 16 years.

“Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business. This new structure will give us more agility and focus in two very competitive arenas,” Ballmer said. “It has been a pleasure to work with Kevin, and we wish him well in the future.”

“Microsoft is a special place and presents opportunity to so many,” Johnson said. “I have been so fortunate to have experienced 16 amazing years of building Microsoft’s business, learning from great leaders in the company and working with phenomenally talented people.”

In the new structure senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live. They are responsible for Microsoft’s end user software releases with new versions of Windows Internet Explorer, Windows and the Windows Live product suite in the pipeline.

For the Online Services Business group Microsoft is looking at internal and external candidates for a newly created senior lead position.

In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft’s search, MSN and ad platform engineering efforts. Microsoft recently announced a strategy to redefine search through innovations in the user experience and business models. As an example, the company’s cashback search program, announced in May, is already generating strong momentum among online shoppers and advertisers

Additionally, senior vice president Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS).

“Our Windows business is firing on all cylinders,” Ballmer said. “We see tremendous opportunity in search and advertising, and we have a clear strategy for investing in success today and growth in the future.”